BRAIN-WISE Thinking for Managers

Our brain is a complex network of neural connections that make millions of decisions every day. If organisations had the connectivity and agility of the brain, the pace of business would be even faster than it is today. As human beings, we consider ourselves to be rational thinkers, able to make rational, informed decisions. Yet, even with our capacity for rational thinking, individuals make errors in judgement. Although businesses operate on the assumption of rational thinking, mistakes are made, often at significant cost.

For a long time, organisations have used tools like strategic planning to improve decision-making. However, the implementation timeframe has become shorter and shorter, to the point where strategic plans are now often out of date before they have been signed off. The wind has changed. In today’s hyper-competitive environment, where anyone can be a market player, agility has become a fundamental requirement to stay on course and in business. Agility ramps up the speed of decision-making. So how can managers be agile in their thinking, without compromising judgement and risking quantity over quality?

How the brain makes decisions The brain uses two systems to process information. System 1 is automatic, instinctive and fast. It is felt in the body as a “gut instinct”. This gut feeling relies on mental shortcuts (called heuristics) that generate intuitive answers, often based on past experiences. System 1 works well in emergency or routine situations involving simple cause and effect, or known problems. However, in more complex, ambiguous situations the mental shortcuts can create biases or blind spots that can result in poor decisions.

System 2 is reflective, logical, deliberate and therefore slower. This helps to gain a strategic perspective on problems that involve ambiguity and require judgement. System 2 thinking requires cognitive effort, involving more energy and processing time. Stress tends to induce more System 1 thinking because the focus is to create stability and control. The danger is that a “quick-fix” substitutes as a solution, proving later to be “dumb”.

People vary in their propensity for System 1 or System 2 thinking. Some people rely much more on gut instinct, preferring to get problems out of the way. Others like to deliberate. In today’s fast-paced environment, taking time for System 1 thinking can seem like wasting time, or getting too bogged down in detail.

The question is, how can managers get the best out of both systems? The answer lies in the ability to integrate System 1 and System 2 thinking, getting a better balance between speed and quality. Interestingly, the brain will feel much calmer and therefore able to handle a lot more information.

This is the key to optimal functioning and better use of energy – at an individual and team level. Higher brain integration means being able to bring strategy and action closer together. Being able to do this effectively is at the heart of leadership.

Getting smarter through integration The key is to be able to harness the energy and awareness that comes with Systems 1 thinking but to direct it thoughtfully to solving problems and making decisions, using System 2. The result is a better integrated and informed brain.

Being comfortable with feedback and diversity increases integration and builds collective intelligence in teams. Our brains have an incredible capacity for change. With effort and practice, there are ways to improve the quality of our thinking and therefore, our decision-making. This builds new experiences that replace old patterns of behaviour. It starts with self-awareness and a willingness to try different ways of responding to situations.

Motivation to change is often determined by what we value. Automation is increasingly replacing routine aspects of work in operations and management roles. Meaningful, rewarding work will increasingly depend on jobs that require smart, non-routine thinking, involving creativity and judgement. A 2015 study by Accenture on the impact of Artificial Intelligence on the work of managers, identified people development and collaboration skills as more important than strategy development and technology. Collaboration is a resource because it uses information diversity to build team intelligence. This is a window into the future of management.